With a job which is not really paying that well, you might find that your budget is getting tighter with more and more debt, not enough money, kids and household expenses. The list of reasons as to why you can be stressed about finances is infinite and this can have a heavy impact on your life. If you can reduce your worry, you will be able to fix a lot of aspects of your life and feel some comfort over the thought that you will get over your financial worries.
Financial Shocks and Pains are More Common Than You Think
Getting financially shocked is more common than you think. According to the Federal Consumer Financial Protection Bureau, an individual’s capacity for absorbing a financial shock is a key pillar of financial maturity and wellness. If you have been financially shocked at some point, you definitely are not alone as around two-thirds of US households have experienced a cut in pay, a health crisis or any other life event which would typically affect their lifestyles for a five-year period or more.
A financial shock is not the most comfortable position to be in and the main reason as to why it can be so devastating is because not too many people have saved enough. A recent survey has revealed at 63% of Americans do not have enough savings to handle a car repair or an emergency room bill, even for those who earn around $75,000 or more.
Create a Budget
When facing a financial crisis, you might think that sticking to a budget would only add to your financial stress. However, this is actually the best tool that can get you across these tight times and would teach you a lot about your finances and later on make you stop worrying about money. When you have a budget, you can identify when and how you are going to spend your resources. You might even be amazed at how little money you need to survive while putting some in savings at the same time.
Just like learning a new habit, the first few months of learning how to budget your money would be the toughest, but you will get used to it over time. You will increase your financial knowledge in no time and you will definitely learn to spend less time worrying about finances.
Be Committed
Try opening an account with the sole purpose of preparing emergency funds. This will teach you to save up even when you do not feel like it. This will inculcate in you a behavioral finance principle which is known as mental accounting. We tend to think of our money when grouped together for a specific purpose and we get less likely to blow up money which has already been designated for a particular purpose.
When the money has not been earmarked for a purpose, we consider it as “free for all” and this is what makes us spend it freely, and maybe even go beyond. Once you have opened an account, make a commitment about how you plan to save and how frequently you plan to put some money in it.
Think Positively
This might not be a direct solution to your financial woes, but merely learning to stay positive can make a difference for the amount of stress that you might feel when working with limited resources. This can be done by tracking your progress towards your financial goals.
Some small steps such as looking at the positive aspects of your life every day, no matter how small, will do wonders in reducing the amount of stress that you have. You can do a lot of stress relieving activities that will not cost you any money.
Get Some Help
If your struggle with financial stress is getting out of hand, do not hesitate and get help from other sources. You can take some short courses on financial management, personal finance and investing. These might help you handle your financial woes.
A professional financial planner can help you come up with a long-term investing strategy that will get you ready for retirement. Regardless of how hard your problems might seem, it is important to know that you do not always have to handle all of these problems alone.
Regardless of how hard or stressed you are about your finances, keep in mind that just like all other things, you can get through this as well. Do not let those financial worries keep lingering in your head and getting you to stay out of focus. What do you think of these tips? Share your thoughts with us in the comments below.